Stocks in Gautam Adani’s enterprises extended their week-long market decline on Friday as the crisis shockwaves that had been sent out by the report from the US-based short seller Hindenburg spread. The market capitalization of the group’s stocks all plummeted in the opening trades, dropping below 10 lakh crore, or more than half of their total worth since January 24. Before the research report, the Group Stocks market cap was greater than 16 lakh crore.
After the S&P Dow Jones Indices announced on Thursday that it would remove shares of Adani Enterprises from popular sustainability indices, effective February 7, the stock fell by about 25%, experiencing its biggest intraday decline ever. This would make the shares less appealing to sustainability-minded funds.
Adani Transmission and Adani Green Energy both experienced declines of 10%, while Adani Ports and Special Economic Zone fell by 14%. Adani Total Gas, a joint venture (JV) with TotalEnergies SE of France, had a 5% decline.
The stock fall intensified as National Stock Exchange (NSE) placed additional surveillance measure (ASM) framework on three Adani group stocks – Adani Enterprises, Adani Ports and Ambuja Cements on Thursday, making them subject to more stringent rules.
Hindenburg Research last week accused the Adani group of “brazen” market manipulation and accounting fraud, claiming that a web of Adani-family controlled offshore shell entities in tax havens were used to facilitate corruption, money laundering and taxpayer theft, which the Group termed as ‘baseless’.
The Group cancelled its 20,000 crore follow-on public offer (FPO) on Wednesday, a day after it had received all of the interest it had received. On Thursday, the company’s chairman, Gautam Adani, stated that given the state of the market, it would not be “morally correct” to proceed with the share sale. “Our assets and balance sheet are both strong. Our EBIDTA levels and cash flows have been excellent, and we have a perfect history of meeting our debt obligations. We’ll keep emphasising long-term value generation, and internal accruals will control growth, he said.
In the last five trading sessions, Adani Enterprises shares have crashed over 61% whereas those of Adani Ports and Transmission declined 35% and 21% respectively.
